Nearly 50 shops closed per day in first half of this year with fashion hardest hit
Almost 50 chain stores per day closed down on British high streets, retail parks and shopping centres in the first half of this year, with fashion the hardest hit sector losing 1,063 stores from chains during the period.
However the rate of store closures slowed compared with the first six months of 2020, a survey conducted for accountancy firm PwC found.
Figures collected by the Local Data Company showed 8,739 shops shut across Britain in the first half of the year. With 3,488 opening in the same period, this reflected a net decrease of 5,251.
In the first half of last year (2020) as the Covid crisis first hit, 11,120 shops closed for a net decrease of 6,001 – 750 more net closures than in the first six months of this year.
PcW said government pandemic supports such as the extended furlough scheme, business rates relief and government-underwritten loans have played major roles in helping operators stay afloat, along with the impact of the rent moratorium.
But PwC warned the second half of this year will be “make or break” for many outlets as Government assistance is wound down.
Lisa Hooker, leader of industry for consumer markets at PwC UK, said: “After an acceleration in store closures last year coupled with last-minute Christmas tier restrictions and lockdowns extending into 2021, we might have expected a higher number of store closures this year. Government support has proved to be a lifeline.
“However, the next six months will be make or break for many, particularly with the reinstatement of business rates, the winding down of furlough and the need for agreement on rent arrears, as well as uncertainty for hospitality businesses around further lockdowns, vaccine passports and other operating restrictions.”
The study surveyed more than 200,000 outlets operated by businesses with more than five branches across Britain, including retail, restaurants, banks, cafes and gyms.
Fashion retailers were worst affected, with 1,063 stores closing in the first half of the year (with the collapse of Topshop owner Arcadia and the exit of Gap from the UK retail market among the highest profile closures) ahead of charity shops with 452 closures, car and motorbike outlets (428) and betting shops (337).
City centres were hit the most severely as people and businesses moved more to suburban or out-of-town locations, reflecting the rise in working from home. City centres suffered a 4.3% drop in their number of retail outlets, compared with a 3% decrease for commuter towns and a 2.3% decline in villages.
London went from being the best-performing region by this measure in 2016, with a 0.9% fall, to the worst across the past two years, with a 2.9% drop, the study showed.
Retail parks, with 636 net closures, fared better in the first half of this year compared with high streets (3,643) and shopping centres (1,464).
Paddy Lillis, general secretary of the Union of Shop, Distributive and Allied Workers (Usdaw), said: “The UK retail sector has been impacted by the coronavirus pandemic on an unprecedented scale, as the staggering number of shop closures demonstrates.
“It is little comfort that there has been a slight improvement on last year and, for an industry already facing significant challenges, the long-term impact will be severe.
“With over 180,000 jobs lost across the industry last year and 200,000 predicted for this year, we need immediate action from the Government to reduce rents and rates for high street retailers, alongside levelling the playing field with an online sales tax.
“The coronavirus pandemic has pushed many retailers and retail workers to breaking point, so we need government measures to be equally significant.
“Retailers need urgent measures to deal with the immediate crisis and a longer term strategy to deal with some of the more fundamental structural issues facing the industry. Usdaw is calling for the Government to adopt an urgent recovery plan for the retail sector.”
Chris Brook-Carter, CEO of retail industry charity retailTRUST added: “Retail has always been central to tackling issues like social mobility and youth employment so the closure of many high street shops could have a long-term impact on these kind of issues for years to come. This is already being seen in the increasing number of people coming to the Retail Trust for help over the last year. We’ve given more than £900,000 in financial aid (double the amount provided from 2019 to 2020) and run nearly 8,000 counselling sessions.
“The high street often represents the heart of the community and, as we've seen during the pandemic, removing opportunities for people to connect can have a huge detrimental impact on our collective wellbeing as well as local economic prosperity. Repurposing vacant space for new and independent retailers or hospitality and leisure businesses will help to protect the social, economic and cultural benefits of our high streets and town centres by creating new employment and driving footfall.
“Retail workers continue to face a great degree of insecurity due to these continuing pressures facing the industry and businesses will have to continue to support their employees' wellbeing by providing the right training and support to help colleagues deal with the ongoing uncertainty ahead."